THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

HOWARD KURTZ, CNN ANCHOR: It is a high honor, an exalted award to be named the winner of the Nobel Peace Prize. So why did the White House immediately have to play defense when the media pounced on Friday's stunning announcement that President Obama had won the prize? Yes, it's almost absurdly early in his term, but for administration officials the reaction seemed to symbolize a skeptical, sometimes hostile, media climate.

Obama offered a low-key reaction to the news and then the pundits had their say.

(BEGIN VIDEO CLIP)

OBAMA: To be honest, I do not feel that I deserve to be in the company of so many of the transformative figures who have been honored by this prize.

UNIDENTIFIED MALE: I think there's an element of ridiculousness to the award.

UNIDENTIFIED MALE: Our president is a worldwide joke.

UNIDENTIFIED MALE: Conservatives hate America. They should love it or leave it, obviously.

UNIDENTIFIED MALE: I loved Obama's faux humility in his little statement today, but I think he should said no.

(END VIDEO CLIP)

KURTZ: So what is the president's team doing to push back against the press, especially the folks at FOX News? I spoke earlier with Anita Dunn, the White House communications director, from the north lawn.

(BEGIN VIDEOTAPE)

KURTZ: Anita Dunn, welcome.

DUNN: Howie, thanks for having me.

KURTZ: As we heard, President Obama on Friday said he did not deserve the Nobel Peace prize. It wasn't something he sought. You have the conservative commentators saying it's a joke. It's an outrage and somehow a bad thing. What's your reaction to that? DUNN: A week ago on the previous Friday, many conservative commentators have been rejoicing in the fact, celebrating in the fact that the United States didn't get the Olympics. One week later they seem to be somewhat bitter at the fact at that an American president was awarded the Nobel Peace prize.

So I think people will draw their own conclusions on the reflexive negativity on the part of some commentators regardless of what happens. I think the bigger point, though...

KURTZ: Go ahead.

DUNN: I think the bigger point is that -- and the president himself said this, that he was surprised, as I think most of the press corps was. He feels that he, you know, didn't really deserve it, as I think there are many people who feel this is still particularly in terms of this presidency, it's the first year.

So I think that those people who are saying this is really quite unusual. This really does seem to be, you know, a big surprise to everyone...

KURTZ: Yes, it is.

DUNN: ... that's not out of bounds. It's absolutely not out of bounds.

And I think what the president also said today...

KURTZ: Let me interrupt you because we're short on time.

(CROSSTALK)

KURTZ: We talked about conservative commentators. Let's talk about FOX News. You were quoted in "Time" magazine as saying of FOX News, that it's "opinion journalism masquerading as news." What do you mean "masquerading?"

DUNN: Howie, I think if we went back a year go to the fall of 2008, to the campaign, that it was a time when this country was in two wars, that we had a financial collapse probably more significant than any financial collapse since the Great Depression.

If you were a FOX News viewer in the fall election, what you would have seen would have been that the biggest stories and biggest threats facing America were a guy named Bill Ayers and something called ACORN.

The reality of it is that FOX News often operates almost as either the research arm or the communications arm of the Republican Party.

And it's not ideological. Obviously, there are many commentators who have conservative, liberal, centrist, and everybody understands that. But I think what is fair to say about FOX and certainly the way we view it is that it really is more a wing of the Republican Party. KURTZ: Is that the reason the president did not go on FOX News Sunday when he did all the other Sunday shows, and will President Obama appear again on FOX this year?

DUNN: Well, you know, Howie, President Obama, he did "The Factor." He did "O'Reilly."

KURTZ: Yes. That was during the campaign. DUNN: That was last year. As president earlier this year when he met with news anchors, met with Chris Wallace...

KURTZ: My question is will he appear on FOX in the next couple of months?

DUNN: You had a two-part question. The first was, is this why he did not appear? And the answer is yes, obviously he'll go on Fox because he engages with ideological opponents. And he has done that before. He will do it again. I can't give you a date because, frankly, I can't give you dates for anybody else right now.

But what I will say is that when he goes on FOX, he understands that he is not going on -- it really is not a news network at this point. He's going to debate the opposition. And that's fine. He never minds doing that. But...

KURTZ: On that point, (inaudible), I want to read a statement from FOX senior V.P. Michael Clemente, who said the following, we'll put it up on the screen. "An increasing number of viewers are relying on FOX News for both news and opinion, and the average news consumer can certainly distinguish between the A-section of the newspaper and the editorial page, which is what our programming represents.

So with all due respect to anyone who might still be confused between news reporting and vibrant opinion, my suggestion would be to talk about the stories and the facts rather than attack the messenger, which over time has never worked." Your response?

DUNN: Yes. I think there have been numerous independent analyses that have looked at the difference between CNN, ABC, NBC -- ABC and FOX, and have seen there is a very different story selection. There's a very even down to the chyron they run below stories that, you know, this isn't us making it up, Howie. You study the media. You know that it's not just their opinion shows.

KURTZ: Take Major Garrett, he's the White House correspondent for FOX News. Do you think he's fair? Do you think he's masquerading as a newsman?

DUNN: I will say -- and I've done this in my interviews. I've differentiated. No, I've not said -- I've differentiated between Major Garrett, who we view as a very good correspondent, and his network, and Major knows this. Major came to me when we didn't include Chris.

KURTZ: Chris Wallace. DUNN: In the round of Sunday shows, Chris Wallace from the Sunday shows. And I told Major quite honestly that we had told Chris Wallace that having fact-checked an administration guest on his show, something I've never seen a Sunday show do, and Howie, you can show me examples of where Sunday shows have fact-checked previous weeks' guests.

We asked Chris for example where he had done that to anybody besides somebody from the administration in the year 2009, and we're still waiting to hear from him. When they want to treat us like they treat everyone else -- but let's be realistic here, Howie. They are -- they're widely viewed as, you know, part of the Republican Party. Take their talking points and put them on the air. Take their opposition research and put them on the air, and that's fine. But let's not pretend they're a news network the way CNN is.

KURTZ: You are making a distinction, just before I move on, between the opinion guys, O'Reilly, Hannity, Glenn Beck, and people like Major Garrett.

DUNN: I'm not talking about people like Major Garrett. I'm talking about the overall programming.

KURTZ: OK.

DUNN: For instance, Howie, "The New York Times" had a front page story about Nevada Senator John Ensign and the fact that he had gotten his former chief of staff a job as a lobbyist and his former chief of staff's wife was someone Ensign had had an affair with.

KURTZ: We reported the story.

DUNN: Did you see coverage of that on FOX News? I'm not talking Glenn Beck, and I'm not talking Sean or "The Factor." I'm talking about FOX News.

KURTZ: I will have to check on that. I assume you know the answer.

Let me ask you about the main stream media in general -- are you and your colleagues at the White House seem to believe that journalists have fallen down on the job when it comes to allowing or spreading or repeating misinformation?

Is that the problem or is the problem that sometimes they're reporting information that's not to the administration's liking?

DUNN: Oh, listen, there's never been an administration starting with George Washington who thought they were covered the way they should be. We make mistakes. We have problems, and we expect those to get covered. We expect to take our hits and we do.

KURTZ: Are you leading kind of an effort, almost like a war room effort, to combat statements that are made as part of this 24-hour news cycle that the president often deplores? DUNN: When the statements are untrue and when they mischaracterize, when they are using opposition research that's inaccurate, when people are just not being honest, absolutely. We're going to go out there and we're going to correct those facts.

We learned over the summer that the mainstream media often will start covering these total inaccuracies as a controversy and that's the way it gets into the press room. That's the way it gets on the front page of "The New York Times." We're not going to let that happen and stand by and let people characterize the president's policies in ways that are simply not true.

(CROSSTALK)

KURTZ: The media did blow the whistle on the so-called death panels and said they were completely bogus. Go ahead and make your point.

DUNN: My point is very simple, which is that the Republican member of Congress who delivered the response to the president's address to the joint session of Congress on health care in September was one of the early sponsors of the so-called death panel legislation, which I don't believe you know, do you?

KURTZ: I'm happy to be educated. Let me ask you one last question before we go.

To some extent, poll numbers being down, problems piling up, things are probably not going well as you would like for the administration, I'm wondering whether people at the White House are a little shell-shocked because Barack Obama got such good coverage during the campaign and now he's getting pretty typical presidential coverage, which is to say, pretty rough coverage.

DUNN: Oh, you know, the reality is one of the great strengths of President Obama as a candidate and as president is his ability to take the long view, understand there will be good times and bad times. Certainly over the course of a two-year campaign, Howie -- and I don't think you'd disagree -- there were times that were quite rough for us, in particular around the Pennsylvania primary and certainly in the general election as well, absolutely. We understand that, and he understands better than anyone that you're going to be up and you're going to be down.

What is true, though, is that you do not have to be a passive bystander when your opponents are seeking to not have a debate on the issues but simply to tear down the president and his presidency, and that's what we're not going to do. We will push back.

KURTZ: The White House is not going to be passive. Anita Dunn, thank you very much for joining us from the lawn.

DUNN: Thank you, Howie.

(END VIDEOTAPE) KURTZ: And we offered FOX News a chance to have someone appear on the program and the network chose to give me a statement that I read moments ago.

When we come back, reaction to the interview you just saw.

KURTZ: Plus, scorched by "SNL," The discussion about the president's paucity of accomplishments lead real journalists to dump on Obama.

And later, David Letterman is shocked, shocked that reporters are digging into his sexual misbehavior.

(COMMERCIAL BREAK)

KURTZ: Anita Dunn didn't pull any purchases in the interview you just saw from the White House, calling FOX News "a wing of the Republican Party" and saying "let's not pretend they're a news network."

Joining us to talk whether that kind of frontal attack makes sense, the Nobel Prize coverage, and the president as fodder for comedians, here in Washington, Ana Marie Cox, national correspondent for Air America radio and contributing editor for "Playboy" magazine, and Chris Stirewalt, political editor of "The Washington Examiner."

Does it make political sense for Anita Dunn of the White House to be openly campaigning against FOX News?

ANA MARIE COX, "AIR AMERICA": I don't know if she was campaigning against them, I think that she was calling it how she sees it. And I think that it may not make political sense, but I appreciate the candor. I appreciate her saying pretty clearly, like why the administration is making the choices they make about where to go.

I think that -- and also, she's correct. I think the administration, when they go on FOX News, they are debating the opposition.

Now, it would be great if she also said and when they go on other networks they're debating, you know, the people on their side.

KURTZ: Yes, I -- for example, MSNBC obviously has quite a liberal lineup.

FOX does beat the drums against the Obama administration on certain stories, ACORN, for example, which was a legitimate story. But it's also got a pretty big megaphone.

CHRIS STIREWALT, "WASHINGTON EXAMINER": Sure. And if you look at what happened with the green jobs czar Van Jones, if you look at Yosi Sergant from the National Endowment for the Arts, and now you're seeing Mr. Jennings from the Department of Education, these stories whip up. The administration had been ignoring them, and so had "The New York Times" and other mainstream outlets have been ignoring them, and it gave FOX and other outlets open ground to get in there and push the administration.

KURTZ: Aren't you underscoring the White House point of view that they view FOX as the opposition?

STIREWALT: I think in those stories, I view FOX as seeing as a clear lane on a story that people were interested in that was rejected in the first vetting process, FOX got a hold of, and pushed through and were successful with.

COX: It also may be vetted for a reason, because I just have to say, the ACORN story actually -- the ACORN story that they covered during the campaign was not really a story, the question of voter fraud. There were not people being signed up to vote for Obama who wound up going to vote for Obama.

There was a sort of a scam going on there in terms of registering people and (inaudible) and then...

KURTZ: Before I move on...

COX: And I'm sorry, I have to say something about this Jennings story, because I think it's really offensive. They're persecuting someone because he's gay.

KURTZ: We don't have time to go through each controversy right now, but did FOX have the same appetite for stories that reflected poorly on the Bush administration?

STIREWALT: Probably not, because certainly they had -- if grooming media outlets works, as it has for the Obama administration, picking and favoring some outlets over others...

KURTZ: Wait a minute. The president has gone on just about everything this side of "Cooking with Rachel Ray." Fox is the exception.

STIREWALT: Right. But that's what I mean, for the Bush administration. So if it's worked for the Bush administration, it's not doubt -- if it's worked for the Bush administration, it's no doubt working for the Obama administration.

But I think the point, the problem is that when the Bush administration tried to exclude "The New York Times" or belittle "The New York Times," it made the administration seem small. It was unworthy.

And I think that for the Obama administration, it is equally small and unworthy if not more so to exclude 3 million viewers of the Chris Wallace Sunday morning show or to try and tune out half of the dial.

KURTZ: O'Reilly is the guy with 3 million viewers. But let's briefly touch on this Nobel Peace Prize flap, whether Obama deserved it or not. He says he didn't. How does it look for conservative pundits, some of them at least, to be slamming the award?

COX: I think it makes them look small, to use the language of my friend here.

I think the correct course of action was taken by quite a few people, including McCain and Tim Pawlenty, who said it's a great thing for our country to have our president recognized this way.

You can then say, which I think McCain had the right line on this, which is I hope he lives up to it. That is sort of, I think, the politic way of saying he may not deserve it, but let's hope he someday does deserve it.

KURTZ: And as in the case of Chicago losing the Olympics, which also prompted some cheering from conservative commentators, does it not look like they're rooting against America?

STIREWALT: I think with the Olympics, that's a significant issue, the Olympics, because it would have been a feather in the cap of the United States and a reflection of our position.

I think that the Nobel Prize committee sort of jumped the shark a while ago. Once you've given Al Gore, Jimmy Carter, Yasser Arafat awards -- right.

COX: Henry Kissinger.

STIREWALT: Right, people say it started with Kissinger, but at least in those cases, it was aspirational. A treaty had been signed. Something had been done.

KURTZ: So you criticize the Nobel Prize Committee, that is fine.

STIREWALT: I don't think it's as serious of an issue. I think the Nobel Peace prize at least...

KURTZ: It's dominated the news in the last 48 hours.

Let me turn to the comedians. Last weekend you had "Saturday Night Live" doing a skit on President Obama, Fred Armisen playing the president, and what he has or hasn't accomplished.

Last night, they couldn't resist coming to this Nobel Prize stuff. Let's take a look at a couple of sound bites from these two skits on "Saturday Night Live."

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: On my first day in office I said I'd close Guantanamo Bay. Is it closed yet? No. (LAUGHTER)

I said we'd be out of Iraq. Are we? Not the last time I checked. (LAUGHTER)

I said I'd make improvements in the war in Afghanistan. Is it better? No, I think it's actually worse.

(LAUGHTER)

Jimmy Carter won it for decades of trying to find solutions to international conflicts. Al Gore won it for his years of educating the U.S. about climate change, and us, well, I won it for not being George Bush.

(LAUGHTER)

(END VIDEO CLIP)

KURTZ: What is the cultural significance of "SNL" seeming to turn on Obama?

COX: I'm glad they've gotten funny again.

(LAUGHTER)

I think that's the cultural significance of "SNL" turning on Obama. When they were sort of being his fan, they were just less funny. And I think it's the job of comedians to poke fun at whatever they can in whatever administrations, and there are certainly like weak spots of this administration (ph) that should be made fun of.

KURTZ: Of course after that skit of Obama having accomplished jack and squat, I turned on cable as I often do, and I saw Anderson Cooper saying "Has President Obama lost his mojo" and Chris Matthews saying "How badly does Obama need something to go right," and Larry King talking about whether Obama is in crisis.

So it did seem to have an influence on the mainstream media.

STIREWALT: It has an influence. But I'll tell you what, it's a storyline that the administration will want to keep encouraging, because right now what they want -- it's OK because he can placate his base. He can run left later. He can take care of them, because, quite frankly, where are they going to go?

So to appear more centrist to get independent voters who are going away from him right now back onboard, appearing to lose the liberal base or being too conservative for the left, that's groovy. That's a great place to be.

COX: I don't think this is whether or not he is too liberal. He hasn't done anything. I think independents are also upset about that.

STIREWALT: They're betting it all on healthcare.

KURTZ: Let me throw this into the mix.

CNN did a fact check segment on the "SNL" skit that we saw. That drew some mockery in parts of the blogosphere. What did you make of it?

STIREWALT: It was actually, our own Megan Gergen, a columnist at "The Examiner," took a pretty salty shot, and I think fair at least in this regard -- it was overall fair, but fair in this regard that nobody -- George W. Bush was the most maligned president in modern era, at least since Nixon for, by comedians, stand-ups and all these folks.

And nobody ever truth-squadded George W. Bush. Just let the jokesters be jokesters and let them be.

KURTZ: Or Tina Fey doing Sarah Palin. But CNN says look, late night comedy, whether "SNL," Jon Stewart or "Colbert," you name it, is where a lot of people get information and why don't we point out where the exaggerations were?

COX: I think that's perfectly fine. I think everything should be truth-squadded. That's what the blogosphere is for also.

I think the blogosphere complaining about that kind of thing is really ironic, because they are the people that tend to just nail down every little piece of fact or fiction.

KURTZ: And you mentioned health care, and this week on MSNBC, Keith Olbermann devoted the entire hour of his program to a personal commentary about the health care battle that used as the primary narrative his own father's health problems. Let's take a brief look at that.

(BEGIN VIDEO CLIP)

OLBERMANN: They moved my father this afternoon. I don't mean they moved him into another hospital. They moved him in his bed into a different position. It was agony for him, agony enough that he could barely see us. I want my government helping my father to fight death, I want by government spend taxpayer money to help my father fight to live, and I want my government to spend taxpayer money to help your father fight to live.

(END VIDEO CLIP)

KURTZ: Is it effective for Olbermann to use his ailing father in what was a very emotional pitch for health care reform?

COX: I am not sure in what way it was effective. There was an article by my friend Mike Madden at "Salon" that pointed out, Americans know that there's something wrong with the health care system in America. That's not what needs to be argued right now. Everyone has a story like that.

I think, in fact, it's just a tad -- I mean, I understand it's a very painful thing for Mr. Olbermann and obviously for his father, but I think all of us have a story like that, whether it's a loved one or a friend's loved one who has been through a really terrible process in the health care system that is broken. KURTZ: I think you hit on something interesting here, and maybe it was over the top, and you can tell me, Chris Stirewalt, but the health care debate and public option and all this, it tends to be so abstract. So what Keith was obviously trying to do there is to make it real by talking about a real-life case of someone who struggled in the hospital.

STIREWALT: I feel very bad for Mr. Olbermann. Obviously this is an emotional issue for him. Is it appropriate or effective? I don't know.

But I will say this. The problem with real-life case studies as the president found with his address to the joint session of Congress is they don't always hold up. Sometimes the guy doesn't get denied treatment or the woman doesn't get denied treatment because she failed to report acne, or whatever the case is. They don't always hold up and they're not always applicable.

Policy is boring, and it's hard to get people engaged on policy, but we must finish this work right now, and we have an obligation to talk about policy.

COX: And that's where the fight is, it's over policy. It's not over whether or not there are people suffering. Everyone knows that. What is the solution to that?

(CROSSTALK)

STIREWALT: Well, 70 percent of Americans want to see substantial reform in health care, but we all have different views on how that ought to be handled.

KURTZ: And Olbermann did make the point that his father has insurance, he has plenty of money, so he's not -- a lot of people are a lot worse...

COX: Perhaps not the saddest story you could tell about a broken health care story.

KURTZ: A lot of people in a lot worse situation, but we're all touched by those close to us.

All right, Chris Stirewalt, Ana Marie Cox, thanks very much for joining us.

And coming up in the second half of "Reliable Sources," Letterman's lament. Has Dave's more heartfelt apology been overshadowed by media disclosures about his "Late Show" girlfriend and a bizarre love triangle.

Plus, watching the peacock, Jay Leno's prime time show only a month old, but critics say he's dragging down NBC.

(COMMERCIAL BREAK)

KING: I'm John King and this is "State of the Union." here are stories breaking this Sunday morning.

John McCain warns president Obama to take the advice of U.S. military commanders in Afghanistan and substantially boost troop levels there or Senator McCain says he will risk making an "error of historic proportions."

A hostage standoff has in Pakistan come to a bloody end. Pakistani commandos stormed a building at army headquarters freeing 39 hostages. At least 19 people died during the 22-hour seize, including four militants and three captives.

President Obama's reaffirming campaign pledges to the gay community. Speaking to the nation's largest gay rights group last night the president promised to overturn the ban on gays serving openly in the military.

The president also called on Congress to repeal the Defense of Marriage Act.

Those are your top stories here on "State of the Union." Now back to Howie Kurtz on "Reliable Sources."

KURTZ: Before you go, my interview with White House Communications Director Anita Dunn, she said that conservative commentators seem to be somewhat bitter about President Obama winning the Nobel Peace prize, and I must say it was kind of surreal to see two days of coverage by all of us about whether this was somehow negative thing for the White House.

KING: But it is a reflection of the times we live in. Some conservatives -- "celebrate" might be the wrong word, but blamed the president when he didn't win the Olympics. And now many of them are saying he didn't deserve this prize because what has he done yet? Many of them, Howie, I think the reason they were so raw about it was they read the statement from the Nobel Committee and took it as much of a slap to George W. Bush than it was an embrace of President Obama.

KURTZ: Right, they were sensitive about that point.

All right, John, we'll talk to you at the top of the hour.

The first apology, let's face it, didn't cut it, not when you're trying to make amends for creepy conduct with women on your staff. So David Letterman faced with more revelations about the subordinates he was sleeping with, gave it another try this week.

He offered a heartfelt apology to his wife. His late-show staff and in a much broader sense, his audience. But as an entertainer, Letterman also felt compelled to mix his contrition with comedy.

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, HOST, "THE LATE SHOW: I spent the whole weekend raking my hate mail.

LETTERMAN: This is only phase one. This is phase one of the scandal. Phase two, next week I go on Oprah and sob.

KURTZ: But Letterman also made a remarkable admission. As tabloid headlines filled the New York newsstands he said he didn't realize that a famous comedian admitting to sex with unspecified women on his program would trigger a media frenzy.

LETTERMAN: It did not occur to me last week when I was discussing having had sex with women who worked on this show that then what would happen is reporters and newspaper people and radio and TV would start pounding the staff and saying, what do you say, are you and this and that? It was very, very unpleasant.

(END VIDEO CLIP)

KURTZ: So are the media wallowing in Letterman's embarrassment? Has he contained the damage or is it going to get a whole lot worse for him and CBS?

Joining us now in New York, Steve Friedman, longtime network producer who was most recently vice president of morning broadcast for CBS, now the president of the consulting group Virtual Media. In Los Angeles, Sharon Waxman, founder and editor in chief of the entertainment site thewrap.com. And here in Washington, David Zurawik, television and media critic for "The Baltimore Sun."

Sharon Waxman, there's been so much focus Dave handled it so brilliantly. Let's put that aside for a moment. How seriously have the media taken the fact that this is a CEO who has acknowledged having sex with subordinates?

WAXMAN: Oh, come on. The media doesn't really care about that. They just care that this is a chance to pounce down the throat of somebody really famous who for years has skewered exactly these kinds of scandals. So, I mean, sorry, it's not like some kind of real indignation over people having sex.

KURTZ: You're saying it's faux indignation because it's just a good, juicy scandal story. Is that what you're saying?

WAXMAN: Completely. Yes, absolutely.

KURTZ: Steve Friedman, look, Letterman acknowledges having sex with an intern. Where have we heard that before? Should he be judged by an entirely different standard than these philandering politicians that he makes a living mocking?

FRIEDMAN: Of course. He's a comedian. Like you said, he may be the first comedian who is impeached.

Here are the facts. The facts are it's a great story, people love it. We're talking about it. NBC, who is in competition with Letterman, has reporters standing outside his studio, and he's turned a personal, a personal negative into a professional positive as more and more people talk, watch, and are interested in David Letterman.

KURTZ: Steve, you've got this other sex scandal in the news, Senator John Ensign, who has already acknowledged having a affair with a former campaign aide, now being reported by "The New York Times" that he helped set up her husband, the ex-aide's husband, in a lobbying firm, helped get clients.

That's gotten, you know, what, 1 percent of the coverage that Letterman's gotten?

FRIEDMAN: Nobody -- well, I can't say nobody -- very few people have ever heard of Senator John Ensign before this little problem came up.

Remember, television is the greatest democracy in the world. People vote with their clicker. And if you don't like Letterman, you can watch a lot of other things. Ensign is an elected representative, which people have to vote on. They will vote with their clicker in or out.

KURTZ: Certainly a big story in the state of Nevada, obviously.

David Zurawik, Letterman says his conduct was "creepy." Most of your fellow TV critics seem to be cutting him a whole lot of slack.

DAVID ZURAWIK, "BALTIMORE SUN": Totally. And I think the fact that most of the critics are still baby boomer men have something to do with it, Howie. I really do.

And I would really take issue with what Sharon said. I have written this on my blog consistently from day one as really a moral issue and an issue of sex in the workplace. I think it's horrible what he did as a CEO with that imbalance of power, and I've written that consistently. People have responded to it.

To say the media say, it's just a juicy scandal and a story and a chance to jump on him. It isn't. This is a real instance.

The second apology was because Dave went to the TV confessional on that Thursday night, but he forgot to show any contrition either to his wife or the people he worked with. And even the apology that you showed, Howie, wasn't really contrition. He was still painting himself and his staff as victims of this rabid tabloid press.

KURTZ: There is an extortion plot here, let's not forget. But Sharon, I want you to respond.

WAXMAN: First of all, I just keep thinking of Roman Polanski, for God's sake. There was an outpouring of rage against Hollywood when they dared to defend Roman Polanski. That's a real case where a crime was committed. It was a long time ago, and there's a debate.

I don't get, like, why do we have to have this huge moral argument over essentially consenting adults? We all know that sex goes on in the workplace. That's because men and women work together and men and women have sex.

Dave Letterman's issue with his wife and longtime partner is his issue with his wife and longtime partner. If we're going to start going in the bedrooms of every entertainer, then it's going to be ugly. ZURAWIK: We didn't go into the bedrooms. He brought the bedroom out to the stage when he tried to control the way this story came out. That first apology was about power and control. It was brilliant. It just didn't do the total job that he wanted to do.

KURTZ: Let me follow up on the point you made a moment ago. What do you mean the fact that a lot of critics and columnists are baby boomers? Why would that affect the way they do this?

ZURAWIK: I think we've always liked Dave. And I think in terms of gender and generation, we are very much in league with him culturally. We're all prisoners in the way of our education and our history. And so we see it through Dave's eyes.

I don't think we've seen this through the eyes of what it's like to be a young woman coming into that workplace. He has absolute power. If you sit at a table and Dave says "She's not funny anymore," she's done. You know what I'm saying?

KURTZ: He's a demigod.

ZURAWIK: Yes.

KURTZ: Steve Friedman, you worked at CBS. How much of a problem is this for the network not just because of Letterman but because of the accused extortionist in this case is Joe Halderman, longtime "48 Hours" producer for CBS News?

FRIEDMAN: Ironically, because Dave is a remnant of the '90s, basically Worldwide Pants owns the David Letterman show. So CBS can honestly say, hey, that's an outside company.

ROBERTS: But that's a dodge. CBS gives him an hour of late night every single night.

FRIEDMAN: It is a dodge, but it's a legal dodge which they can hide behind.

As far as the "48 Hours" guy goes, he's one guy. I don't know that you can hold CBS responsible for one guy.

Howie, can I say something about fame? Fame is really the aphrodisiac of Hollywood, like money is of Wall Street, power is of Washington. Why else would a mother let a 13-year-old girl hang out with Roman Polanski? Why else would a woman like Clarkson go home with Phil Spector and his fright wig?

And these people want to get to fame, and there's an underbelly there, the users and the users and the used. And if you go back into the '50s, this is not new. "The Sweet Smell of Success," a movie with Burt Lancaster and Tony Curtis, I mean, the idea of fame and near fame, that's what drives a lot of this.

KURTZ: That's a really interesting point, Steve.

Let's get specific here. Let's talk about Stephanie Birkitt, who is David Letterman's assistant, even now, former girlfriend of his on the show, as obviously, we have found out. And then she became the girlfriend of Joe Halderman, the guy who has been indicted in this case.

I talked to a friend this week of Halderman, Dr. Bob Arnot, a lot of people know him from television, and he tells me it was Halderman who discovered Stephanie Birkitt's letters as kind of a diary that she was writing to herself that showed him last December that she was still having a romantic relationship with David Letterman.

And then, again this is according to Arnot, who is relating Halderman's story, who is obviously trying to defuse these blackmail charges, supposedly Halderman discovers the two of them embracing just last August and feels like he's been played for a fool and then he confronts Letterman.

So let me ask you, Zurawik, this all sounds like a b-movie.

ZURAWIK: It does. And people try to marginalize this Halderman, saying oh, he's either -- they called it a "crime show." This is a CBS news producer.

This, you know, Steve is absolutely right about the legal distance that Letterman has, but this thing goes right into the heart of the CBS newsroom. I think CBS could at least make a statement.

Look, we all know people who make as much money as Letterman aren't going to be punished in this business, but they could at least make a statement saying we're going to investigate this and we don't approve of this kind of behavior. CBS said nothing.

This is a CBS news producer. CBS news stands for something in this industry, I think.

KURTZ: We've touched on the fact that Letterman, like Leno and Stewart and the rest of them, make fun of politicians who can't keep it zipped, shall we say. Dave shrewdly poked fun at himself in his monologue the other day. Let's roll that.

(BEGIN VIDEO CLIP)

LETTERMAN: OK. Let's look at the news. First of all, Bill Clinton said -- no.

(LAUGHTER)

Good news for South Carolina Governor Mark Sanford because he --

(LAUGHTER)

(END VIDEO CLIP) KURTZ: Sharon Waxman, does that suggest that Letterman will have to pull his punches just a little bit in these sensitive areas?

WAXMAN: Yes. I think he's going have to do exactly what he's doing. He's a rather -- he's used this rather brilliantly, you have to say.

I don't know how long it's going to go on, because after a certain point he does have to go back to doing his real job, which is skewering the people in power and making fun of people who are in the headlines, and he'll have to find a way to put this in a separate category and still legitimately be able to deliver the joke.

That's going to be the challenge. Is it this week? Next week? Is it four weeks away? That's the question.

KURTZ: But, of course, part of it depends what else comes out of this case. There's a criminal investigation and Halderman's lawyers will be taking depositions.

WAXMAN: Well, there is a criminal investigation.

KURTZ: No question about that.

WAXMAN: There is going to be a trial.

KURTZ: And there could be a trial unless there's some kind of plea bargain.

Steve Friedman, even if the media coverage turns negative, and the New York media tabloids are really chasing this story, will it ultimately be up to the viewers whether or not Letterman sustains any long-term damage here?

FRIEDMAN: Absolutely. And the landscape, as we'll talk about later with Jay Leno is really favoring Dave lately, with the idea that it's his turn. Leno is out there. People used Leno's escape from 11:30 as a reason to watch something.

And you know, I hate to say this because it's a cliche -- it's almost as if the more you talk about somebody, the hotter they become, the more interesting they become, the more viewers they get.

KURTZ: So under that theory, David, this all helps Letterman because he's so much in the news.

ZURAWIK: In a way, it does. You showed a clip where it's cold inside and cold outside. And I thought, that's Johnny Carson talking about his marriage.

KURTZ: His multiple marriages.

FRIEDMAN: God, yes! But I think people do want a little sense of the risque with the late-night hosts, you know? And so he does have that in his favor. KURTZ: In fact, there's a joke making the rounds that there's pressure on Jay Leno now from NBC executives to have an affair so he can level the playing field.

Let me get a break here. Up next, the prime time problem, is Jay Leno's rating swoon wreaking havoc on NBC's local newscasts? Here's Jay taking a little swipe at his old rival Letterman.

(BEGIN VIDEO CLIP)

LENO: If you came here tonight for sex with a talk show host, you've got the wrong studio.

(END VIDEO CLIP)

KURTZ: Jay Leno's new show has been on the air for a month now and the ratings are abysmally low for primetime, sometimes 4 million to 4.5 million, sometimes even less than 4 million.

Here's a look at the 10:00 program.

(BEGIN VIDEO CLIP)

LENO: The second lab, we have some obstacles. Al Gore may jump out in front of you. You will add one second of time if you hit Al Gore.

OK. We're testing it out. OK. I go down there and watch when I hit the end! Boom!

(END VIDEO CLIP)

KURTZ: Steve Friedman, the late newscasts at some NBC stations are really getting killed. WNBC in New York where you are is in fourth place. L.A., Philly, Dallas down more than 30 percent in the ratings.

How much pressure can local stations put on the network over Leno's low scores here?

FRIEDMAN: Almost none, because the idea that the affiliates or local stations count anymore in this multiplatform, multi-world view of television, it's over. They really don't count that much anymore.

And I'm not here to apologize for NBC or Jay Leno, but the Jay Leno thing is an experiment. And before you throw in the towel, you have to see how it does against reruns of those shows which have only 22 original episodes.

So I think NBC is happy in the first week when the ratings were way high. They're not as happy now when they've gone down. I think they want to see how it's going to do against reruns of the CSI's of the world.

KURTZ: Right, you've got to take the long view. NBC can still make money on this thing, Sharon Waxman, because it costs so little to produce, but how much patience will Jeff Zucker and the rest of the NBC brass have with these kinds of ratings figures from the Leno show?

WAXMAN: They have said from the outset that they're going to give it at least a year. So we're in for a long haul unless they blink.

My understanding is that NBC ad rates have been extremely low for the latter part of the year. So it will be interesting to see -- I don't know if it's directly related to Leno, but that seems to be what I'm hearing from television sources.

So the question is how long are they going have the stomach for really low ad rates if it continues to burn through the entire year? But they've said that they're in it for a long -- excuse me, that experiment, they'll give it a long shot.

KURTZ: Right.

David Zurawik, what is it with the 10:00 low? It seems weaker than Jay's "Tonight Show."

ZURAWIK: It is weaker than his show. Boy, the clip you showed, if you wanted to talk about the cheapening of network TV, it went out of color. It looked like something from 1949 television when they were still experimenting.

But you know, Howie, it really is killing the affiliates. And I know what Steve said is NBC's line on this, but in Baltimore, the first-rate station -- the first-place station at 11:00 is now a deep second at 11:00. And that's where most of the local stations get their revenue from. So they lose and the viewers lose. NBC this week canceled "Southland," a pretty good cop drama before it ever aired for its second season because they said it was too dark, they don't have any place to put it anymore. It could only run at 10:00.

So we're getting a different look at prime-time television and the affiliates are getting killed. NBC might be the only one that does marginally all right with this, but we all suffer.

KURTZ: And Steve Friedman, before we go, what about Conan O'Brien taking over "The Tonight Show"? He's down to about 2.5 million viewers, just over half of what Jay had been pulling. Can we now say that this was a bonehead move to take the number one guy off of 11:30 and bring in Conan?

FRIEDMAN: Well, I mean, it was NBC's and GE's philosophy that you move too early rather than too late, this is what they're going to do. And with Conan O'Brien, they could talk about demographics.

KURTZ: He's drawing a younger audience which advertisers like.

FRIEDMAN: That's right, and that's what advertisers like. Again, I think when you do a daily show, you can't look at it as a two or three-week time period. You have to look at the first three, four, five months, not the three, four, five weeks.

KURTZ: One thing we've learned here is that comedy is an important part of not just NBC's lineup, but it is an important part of the television culture and a lot of revenue depends on it.

Sharon Waxman, Steve Friedman, David Zurawik, thanks very much for stopping by.

KURTZ: Talk show hosts sound off for a living. That's their job. And the rest of the media spend an awful lot of time talking about them.

But how influential are they really?

(BEGIN VIDEOTAPE)

KURTZ: First, was there Rush Limbaugh on the cover of "Newsweek." then it was Glenn Beck on the cover of "Time." Ever since President Obama took office conservative talkers have seized the spotlight.

Whether it's Beck cheerleading for the tea party marches or Rush calling for the Obama administration to fail or Sean Hannity leading the charge against ACORN, they've had an impact.

Keith Olbermann may call them "the worst persons in the world" on any given night, but that just confirms that they are big targets.

Lately, though, the talk show titans have been drawing some flack from the right. Former Bush speechwriter David Frum has been outspoken in criticizing Limbaugh, and "New York Times" columnist David Brooks is taking on the whole gang.

DAVID BROOKS: Even on the Republicans we've got frankly people I consider loons and harmful for America, Glenn Beck, Rush Limbaugh, Mark Levin, all these guys. They don't control the Republican Party. They were all against John McCain in South Carolina in the last primary season, and John McCain won the South Carolina primary.

They have actually no power over real Americans. It's a media circus.

KURTZ: On "Meet the Press" GOP strategist Mike Murphy agreed and said FOX News and MSNBC are part of the problem.

MIKE MURPHY, GOP STRATEGIST: What's happened is we've created -- there is kind of a freak show business now of each side which amplifies the shrillest voices. We have one party cable networks now, one of each, and what that does is dumbs down the debate. KURTZ: Limbaugh says Brooks is just jealous. Besides, he told Politico, how many Americans know who David Brooks is? And Mark Levin, another conservative radio host, dismissed Frum as "irrelevant and incoherent."

But what about the larger point? Limbaugh, Beck, and Hannity have no party machinery. You don't measure your clout by any one election. Their power lies in influencing the debate on everything from Afghanistan to ACORN, from the Olympics to Obama himself, and that, without question, they have done.

(END VIDEOTAPE)

KURTZ: And if liberals or conservatives like David Brooks don't like what the high-decibel pundits say or think they're peddling misinformation, they should go after them in the media marketplace, not with boycotts or name-calling or screaming or shouting, but on the battlefield of ideas.

Still to come, Facebook feedback -- what some of you are saying about whether we are get carried away with David Letterman's sex scandal.

(COMMERCIAL BREAK)

KURTZ: Now that we've weighed in on the David Letterman story, it's time for your feedback.

I asked on our Facebook page, are the media devoting too much attention to Letterman's sexual disclosures and the extortion plot against him. There was no shortage of comments.

Susan Elizabeth says "Absolutely. He is not a politician or a religious leader who is preaching family values. He's a comedian and TV personality. If he slept with his entire female staff, that makes him a dog. Whatever. There are lots of dogs in this world."

Adam Donaldson writes, "You know what would be awesome, Howard? If I it could turn on my news and get some news rather than salacious gossip. People probably know more about Letterman's sex life than what's going on with Afghanistan, health care, and climate change combined."

Victoria Abernathy had this to say, "Anyone that ever watched him did so knowing that he was a self-absorbed sleazebag. So why are they surprised about his history?"

"The irony of the story is that Letterman took appropriate action by going to the authorities to stop a case of alleged blackmail. Now the media is working around the clock to fulfill the disclosure threat made by the blackmailer and going well beyond the scope of the original threat."

And Joe Schneider says "It's called mass media for a reason, to appeal to the masses. The masses are interested. Check Letterman's ratings on Monday, 5.6 million, I believe." Thanks for the feedback. You can follow me on Twitter as well.

As I turn things back it over to you, John King on this Sunday morning, the new cover of "Newsweek" has the vice president out there with the headline "Why Joe is No Joke."

KING: I have it right here, Howie. There are a lot of jokes about Joe Biden, how he can't stop talking, how his speeches are so long, how he steps on his tongue now and then, but this article they will like in the vice president's office.

It says the president doesn't always take his advice, but that he does always listen. And the vice president, I'm sure you're not surprised, isn't shy.

KURTZ: The piece says his persistence in truth telling has paid off.

There was a lot of cooperation from Biden aides. I'm wondering if you think the White house wanted this story on a magazine cover.

KING: Too late if they didn't.

(LAUGHTER)

I think this gets overdone sometimes. I think there are times when the White House is frustrated with him, but there is no question they have a great deal of respect even if sometimes I think he wanders a bit off the reservation.

KURTZ: I look forward to seeing Biden on "State of the Union" soon. All right, John. Take it away.